This revisions shows that elements of rebalancing are further along than generally credited, key components of this reform process still need to be accelerated.
China has greater inequality with more wealth with the richest people.
China is bigger, not smaller:
Their reassessment suggests that China’s 2008 GDP was most likely 13.1 to 16.3 percent larger than official statistics indicated at the time. Beijing’s reappraisal of 2008 GDP (released in Spring 2015) adjusted up the official number by less than 1 percent, leaving the bulk of activity we identified uncounted.
The service sector is most problematic:
We can rank the areas of the economy where the greatest adjustments are required. At the broadest sector level, the hard to count services cluster is unsurprisingly in greatest need of upward revision—22.2 percent in our estimate. The secondary sector, consisting of industry and construction, needs a smaller but important 8.3 percent revision. The primary sector, meanwhile, still requires a modest discounting by our reckoning. Last, we examined elements not even covered in China’s official GDP, but which should be once practices are modernized—in particular the capitalization of research and development investment
Real estate is even more important than currently reflected:
The distribution of specific industrial underestimates taking place is striking. The largest revision, in real estate, is responsible for 38–48 percent of our total adjustment, suggesting that China’s GDP growth has been even more dependent on a property boom than already understood. That output pattern also disproportionately benefits a minority of wealthier Chinese who are already widening the gap in income and wealth